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The SpaceX IPO will be the theft of the century

montanaskeptic.substack.com

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Re: The SpaceX IPO will be the theft of the century

#71

Post by piva00 »

l23k4 wrote: post #67
general1465 wrote: post #65

Earlier quoted context omitted.

So what is the reason of Tesla having greater valuation than Toyota while making 3 car models and you can't connect Apple Car / Android Auto into either ? Do you think that Kathie Woods trying to memestock Tesla to 2000USD/share is normal? Or do you think that promises like 20 million cars / year within 2030 while having extremely limited amount of models were ever achievable?

Tesla has been able to demonstrate significant growth which Toyota hasn't. >Do you think that Kathie Woods trying to memestock Tesla to 2000USD/share is normal? Frankly, I don't see why any sane adult would care enough to have an opinion. >Or do you think that promises like 20 million cars / year within 2030 while having extremely limited amount of models were ever achievable? I doubt the timeline was, I don't see wh…

> Tesla has been able to demonstrate significant growth which Toyota hasn't.

That doesn't mean much when Toyota was already a behemoth company, it's much harder to grow when you are already enormous.

Re: The SpaceX IPO will be the theft of the century

#72

Post by elp »

jorisw wrote: post #52
saltyoldman wrote: post #4

This is just eds. Same guy here: https://en.wikipedia.org/wiki/TSLAQ He's got some kind of beef with Elon and has predicted TSLA stock will crash many times.

What is EDS. It's mentioned in the Substack comments as well.

Elon Derangement Syndrome I presume.

Some of the pessimists are absolutely perma-bears who hate any thing to do with Elon to the point of madness, but still doesn't change the fact that this IPO makes no financial sense no matter how reasonably you try to look at it.

I listened to all 3 hours of the Dwarkesh interview with Elon. I would really really love to see mass drivers on the moon, but all the facts were obviously made up on the spot. This wasn't just the usual Elon exaggerating. It was pure fantasy stuff. All the hard engineering questions were just being hand-waved away along with reasons of why the data centers couldn't be here on earth.

Combine that with the fact that Elon will retain complete control of SpaceX. Yeah no. I wouldn't be crazy enough to short the stock but I really don't want any of my money in it either.

Re: The SpaceX IPO will be the theft of the century

#73

Post by l23k4 »

Pooge wrote: post #69
l23k4 wrote: post #63

Earlier quoted context omitted.

Pension funds are perfectly capable of switching to a different product if they don't want index funds that reflect the market. But they do want index funds that actually reflect the market, so they want these rule changes. The management of those indices is just doing exactly what the vast majority of their customers want.

What? Absolutely not. They are doing what the President is telling them to do. The customers of indexes are providers of funds (Vanguard, BlackRock, ...). In turn, people like you and me are clients of those providers. Indexes are changing the rules thanks to lobbies by the world's richest people so they can get even richer by dumping their overvalued stocks. If you are not a SpaceX investor, you are losing money. In…

>What? Absolutely not. They are doing what the President is telling them to do.

This is a paranoid delusion.

These rules were never on particularly solid ground, it's only natural to see them gone when you have significant upcoming IPOs changing the structure of the market. It is the job of these indices to keep up with that.

Re: The SpaceX IPO will be the theft of the century

#74

Post by l23k4 »

onel wrote: post #70
l23k4 wrote: post #48

Earlier quoted context omitted.

Those poor pension funds, unable to make their own decisions. Forced to keep all of their money in $NDX forever. It must be terrible to be so utterly powerless.

That's not how pension funds work though. Pension funds are extremely conservative. They invest on horizons spanning decades. They can't just make decisions from one month to the next. The very short time frame of an index accepting Tesla is the problem. It's like telling a train "quick, make a right here"

And how do you suppose these rules were originally introduced? Do you believe that the reasoning was particularly solid then, and is it directly applicable in the current situation?

Re: The SpaceX IPO will be the theft of the century

#75

Post by [deleted] »

prolly97 wrote: post #55
dozerly wrote: post #39

Earlier quoted context omitted.

To be fair, they were overvalued in those days as well. Just because the on-paper value went up doesn’t make their statements false, it just means we’ve continued the charade.

When I followed TeslaQ, the valuation was around 60b. Today Tesla has 39b in accumulated retained earning (pr latest 10k, not q). If the thesis was that Tesla would be unable to create a system that would churn out cars that could be sold at scale with an economic surplus, then we have to reject it.

[deleted]

Re: The SpaceX IPO will be the theft of the century

#76

Post by rich_sasha »

prolly97 wrote: post #55
dozerly wrote: post #39

Earlier quoted context omitted.

To be fair, they were overvalued in those days as well. Just because the on-paper value went up doesn’t make their statements false, it just means we’ve continued the charade.

When I followed TeslaQ, the valuation was around 60b. Today Tesla has 39b in accumulated retained earning (pr latest 10k, not q). If the thesis was that Tesla would be unable to create a system that would churn out cars that could be sold at scale with an economic surplus, then we have to reject it.

I mean. Sure. Value is ultimately what someone will pay for something, and the name of the game is to buy low and sell high. People who bought TSLA made money.

The point is, it's completely irrational - like winning lottery 3x in a row. Tesla's PE ratio, depending on how you look at it, something like 200-350. That means that if nothing changes, the expected return of earnings on your investment is 0.3-0.5%. You'll struggle to find a riskless fixed income instrument paying this little.

Ok, so clearly that's not why people buy this. They hope the earnings will increase, and/or the value of the stock. Seeing as you can lock in 4.5% riskless yield for 10 years, you'd hope for at least this much from a stock - realistically much more. Let's call it 7% - still low methinks but so be it. That's 14-25x more than it earns now.

You could say you don't care about earnings - just about price increase. Sure. But even to maintain the meagre PE ratio, earnings would have to double over 10 years. But realistically - this PE seems crazy for anything other than a crazy-high-growth stock. Which maybe Tesla is now but can't be forever. If it crawls down to a meagre 50x PE in 10 years time, to make your 7% return, earnings would still need to increase 8-14x in that time.

Maybe they can do it. They now sell, apparently, about 2% of all cars. No idea if total car production is stable; if it stays the same, and their margins stay the same, Tesla would need to increase their market share 8-14x too, to 16-28%. Maybe they can improve their margins and sell fewer cars, yet make more money - but typically increasing market share comes with lower profit margins as you lower the price to sell more stuff.

This is a veery bullish scenario. This is something an investment analyst for any other stock would need to sweat blood to argue. Yet this is what youre committing to when buying Tesla today.

Of course none of it really matters at the end of the day. Prices can levitate forever given enough believers. Wars can apparently be declared won with tweets with nothing to back them up - repeatedly. But if you think reality will come at some point, this is what is needed for Tesla to make sense as an investment.

Re: The SpaceX IPO will be the theft of the century

#77

Post by elp »

mordae wrote: post #37
khazhoux wrote: post #10

How can a public sale ever be a theft?

Most have their pension automatically track index. Nasdaq changes rules so that the pension funds are forced to buy stock while very volatile and likely overpriced.

I'm willing to bet that most funds will just change their reconstitution process to give themselves a much longer period to add new IPO stocks to their portfolios and end up avoiding most of the drama.

On the other hand if they don't I'm making popcorn because the lawsuits and political fallout if / when this goes wrong is going to be epic.

Re: The SpaceX IPO will be the theft of the century

#78

Post by orwin »

No.

The future pedo-island in Albania, ex-protected island where the Trump family promised to only develop 8% of it before developing everything, skirting every environmental rules, every foreign investment rules to destroy what was a natural park where at most you could anchor next to is the theft of the century.

This is just american capitalism in america.

Re: The SpaceX IPO will be the theft of the century

#79

Post by orwin »

l23k4 wrote: post #66
gorgoiler wrote: post #29

Why do index funds follow the exact companies in the index itself? Is it simply a branding thing? I’m buying into S&P500 because S&P500 is a highly recognized term used to mean “The US Economy”? I feel that what this article is telling me is that passive funds are becoming active funds by way of manipulating the index itself. Kind of like if you’re passively invested in Brazil winning the World Cup but you can’t adju…

>I feel that what this article is telling me is that passive funds are becoming active funds by way of manipulating the index itself. It's wrong. They're undoing a previous manipulation and making the index more accurately reflect the market.

Explain to me how adding weights to the float is undoing a previous manipulation and not manipulating the numbers.

Re: The SpaceX IPO will be the theft of the century

#80

Post by defrost »

orwin wrote: post #78

No. The future pedo-island in Albania, ex-protected island where the Trump family promised to only develop 8% of it before developing everything, skirting every environmental rules, every foreign investment rules to destroy what was a natural park where at most you could anchor next to is the theft of the century. This is just american capitalism in america.

> before developing everything

Have they cleared all the landmines and UXBs already?!?

That was fast.

* https://www.theguardian.com/world/2025/jun/24/trump-family-k...

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